Maryland Senate Unanimously Votes to Ban Sweepstakes Casinos
The Maryland Senate took quick action on Senate Bill 860, which prohibits operating, conducting, or promoting online sweepstakes games.
Maryland Senate votes to remove sweepstakes casinos. © Clker-Free-Vector-Images, Pixabay
Key Facts:
- Maryland Senate votes to prohibit sweepstakes casinos
- Maryland SB 860 passed unanimously
- The Bill also makes it easier to unlicense and fine any affiliated partners
- It’s fate in the Maryland House remains uncertain
The Bill also allows the State Lottery and Gaming Commission to abstain from issuing licenses to certain companies that provide various ancillary services to sweepstakes operators in the state, like geofencing, payment services, or even affiliate marketing.
The Bill passed out of the Budget and Taxation Committee with a 13-0 vote, and the entire Senate also approved it unanimously 47-0 a day later.
Hearings on the Bill grew heated and stretched on as a spokesman for the Social and Promotional Games Association (SPGA) argued that sweeps’ business model was already legal under Maryland Commercial Code 13-305 and that they were similar to Starbucks or McDonald’s free-to-enter contests.
Light & Wonder’s Brad Rifken injected both logic and humor into the debate. He pointed out that sweepstakes operators offer casino-style games—slots and blackjack—where players can win real money.
The so-called ‘gold coins’ they sell? Identical in value to the sweeps coins being gambled. Noting that, indeed, “if it walks like a duck and quacks like a duck, it’s a duck.”
VGW, the largest of the online Sweeps operators, does not belong to the SPGA, the industry lobbying group. However, they also had a spokesperson at the meeting who compared their offerings to Candy Crush and said that their use of slots and other casino games as a format was for entertainment value and not gambling purposes.
Perhaps seeing their chance for a little pushback, the Maryland Lottery and Gaming Control Agency sent a Cease and Desist letter the following day to VGW (Virtual Gaming Worlds), the owner of Chumba Casino and Luckyland.
Тhey outlined their own stance on the law, that they did believe VGW was operating an illegal and unlicensed gambling enterprise, and asking that the company provide “any legal analysis or opinion interpreting Maryland Law that concludes, advises, or suggests that VGW may legally offer sports wagering, casino games or fantasy competition games in Maryland without Commission registration or licensure.”
They gave VGW until EOD on March 27th to provide this information and business records deemed necessary or cease operations in the Old Line State.
Since the House will convene on March 20th to discuss their Bill HB1140, the company is in the unenviable position of either ignoring the Cease and Desist and risking the Maryland House passing their Bill due to VGW’s supposed intransigence on the matter, or they can provide all of the records and a supporting legal theory on why they believe they are allowed to operate.
High5Games Faces Legal Charges
The stakes on this showdown were raised exponentially over the weekend when Connecticut charged Sweeps operator High5Games with more than 1,000 misdemeanors for operating an illegal online casino in that state.
It would seem quite possible that any business records provided would simply strengthen Maryland’s hand if and when it decides to follow in Connecticut’s footsteps and file actual criminal charges.
Last week, it seemed that the Maryland House might find a way not to vote on HB 1140 or perhaps not even pass it out of the House Ways and Means Committee.
After the events over the past several days, that is seen as much less likely, which means that VGW has some tough choices.
If it leaves the state, like its competitors McLuck and Hello Millions, which pulled up stake several weeks ago, it will leave under a cloud of suspicion and knowing that more cease-and-desist letters will be coming from other states’ attorney Generals or Gaming Commissions.
If it stays, it risks the ire of the Maryland legislature and the possibility that Sweeps legislation will pass and go into effect on July 1st, regardless. With legal battles mounting and state regulators circling like sharks, sweepstakes casinos may soon find themselves running out of safe harbors. What happens in Maryland could set the tone for further nationwide crackdowns.
